As mentioned in the article as well as by several comments I fully agree that always ensuring a proper governance and always being in control is key in any outsourcing project. But in order to be effective in keeping costs low as well as being fast I think automation in governance is vital. This is why we have started a SaaS startup providing exactly that (for offshore/nearshore SW projects, nothing specific to banking): www.plixos.com

Yes that's something that seems to have changed in the last year or so. The barriers that used to exist for larger institutions when it came to the cloud and outsourcing solutions, such as security issues and bandwidth of cloud providers, are slowly being addressed by the providers. Starting to see more big banks interested in this.

Not only will smaller banks continue to outsource key parts of their technology stack, but larger firms will begin to see the benefits as well. Even large firms can potentially cut costs and improve service by moving legacy applications to newer, outsourced/cloud solutions.

More and more community banks are going to have to outsource key parts of their technology going forward to stay competitive and this issue of outsourcing without losing control of key technology functions will grow long with that.